Is Your In-House Advertising Disappointing You?

Businesses of all sizes are making a big mistake when they try to save money by doing their own advertising. Times are tough, I know, and the knee-jerk reaction is to cut costs by taking your marketing in-house. But if you really want to talk about return on investment or the most bang for your buck, get a pro to boost your sales with communication skills honed over a career in the business. After all, you wouldn’t ask a plumber to fix your computer network – why would expect a {insert your expertise here} to create a great ad?

If in-house advertising were such a great idea, Coca-Cola would do it.

In fact, Coke’s agencies include some of the most creative in the media and agency worlds, including Wieden & Kennedy, Crispin Porter & Bogusky, Starcom MediaVest Group and Mother, among dozens of others. They just cut their European roster from 20 firms to 4 in order to save money, but they’re still using experts in foreign countries and cultures or niche experts to promote specific brands. If anyone could, Coke (or Home Depot or Delta or Waffle House) would be able to afford the best minds and build their own in-house agency but they choose to hire ad agencies instead. Are you smarter than Coke?

Using a Builder to Create a Marketing Campaign

In this true case history, substitute {your name here} each time I mention {the builder}. We recently went to a home improvement store, something like a Home Depot, to talk about a grand opening event and ongoing advertising. We asked the builder {your business}, who was handling the marketing for the store, what he had done before and he showed us coupons and newsletters and small ads and direct mail cards – all of which had resulted in little or no return. The builder said, “That’s why I’m calling you. I just don’t know what to do.”

Diplomatically, I refrained from saying that’s why you don’t ask a guy who’s good with hammers to write headlines and copy with graphics. Or why the guy who knows his business inside and out can’t be expected to know the right strategy and tactics to position his firm against the competitors’ and where to reach the people who will buy his goods and services. But the builder {you} had already blown his budget for the year and his boss had said, “Advertising doesn’t work.”

It Works for Coke (and McDonalds and Home Depot)

The most successful companies in the world spend $Billions every year on advertising in every medium from radio to print to tv to the internet. They advertise because it works to boost their brand and increase their sales. More revenue, more profitability, more return on investment. The big guns use ad agencies to get the biggest bang for their buck on every dollar they spend and they are rewarded with results.

Unless You’re Smarter Than Coke – Hire an Advertising Pro

You are expert at what you do. Ad agency people are experienced marketers. They’ve studied best practices in school or on the job. They are creative people who will give you a new perspective or practical people who have seen what works and what doesn’t by working their trade day in and day out for years. You would tell your own prospects, “Let your people do what they do best and leave the {insert your expertise here} to us because we’ll get you the best results at the best price.” If ad agencies work for Coke, the smartest soft-drink organization in the world, then advertising will work for you too. Unless you take it in-house or hire a builder (do-it-yourself).

Steve Brett
58 Advertising
Copyright June 2009

Newspapers Are Dead – Long Live the News

Everybody knows that newspapers as we know them are a dying medium. Everybody can see that where once there may have been several or even dozens of daily and weekly news publications in cities like New York and Chicago or morning and afternoon editions in communities throughout the country, today the broadsheets are dropping like flies. Just as everyone knew that television would kill radio and everyone knows that the internet will put an end to television, newspapers will soon disappear from the face of the earth.

Truth be told, newspapers are in trouble. Like the Big Three (or the Detroit Three if you prefer and by the way, what are we going to call them now that Fiat owns a piece of Chrysler?), the papers didn’t see the shift in technology, trends and lifestyles that were omens for the changes that would diminish their influence and put a big crimp in their bottom lines. Advertisers are now jumping ship like passengers from the Titanic because readership is running like lemmings to the sea of cable television channels, web sites, blogs and podcasts. Our attention spans are miniscule and the daily on the doorstep is at least 18 hours behind the breaking news that we get via alerts on our desktops and our mobiles. Nobody wants the product that only a daily can deliver any more, right?

Actually, yes and no. Nicholas Negroponte, Chairman Emeritus of the MIT Media Lab, in his groundbreaking book, Being Digital, wrote in 1995 that there would be no need to cut down trees to produce paper, using all the water and energy resources needed to deliver tons of actual product when we can deliver a few megabytes of data at the speed of light at virtually no cost. What Negroponte didn’t fully anticipate when he was predicting the future was just how much information would be transmitted and how it would be sorted, searched, re-packaged, and regurgitated.

Further, he was thinking meta thoughts in the ideal and he didn’t predict in a practical manner that e-bay, Craigslist, Amazon and hundreds of other sellers, large and small, would use the internet to appeal directly to buyers and therefore greatly reduce the newspapers’ ability to sell advertising. And that’s the crux of the issue – without advertising dollars to pay the freight, there’s no way in today’s model to pay for the cost of the news. But the newspapers themselves should have seen it coming (like the Big Three), when their bread and butter classified car ads, apartment listings and personals started showing up online – free of charge.

A recent wag said newspapers can’t survive because who would pay for something they can get free. Actually, everyone’s been asking that question. First of all, everyone seems to be forgetting the cable television model and premium services like HBO and Showtime and pay-per-view wrestling and concerts when they ask that question. Or Sirius and XM radio. I mean, who would have imagined that we’d pay for radio and television shows when they’d always been broadcast free of charge? (And by the way, I still get furious when I think about how we got duped into paying for a drink of water.)

And beside, what do the newspapers have to offer that people would be willing to pay for? The answer to that can be summarized in a single word: News.

Newspapers will have to become news organizations to survive. Marketers and advertisers of substance will pay to ride along with the kind of in-depth news and smart reporting that is unavailable on CNN or, of late, even the Wall Street Journal. People pay for newspaper subscriptions; they’ll pay for the news online. The New York Times and the Atlanta Journal Constitution will have to buy a craigslist or develop their own online classifieds, or partner with Google and Yahoo, to pay for their news bureaus – and brand advertisers will pay the dollars to be seen by thought leaders and thoughtful readers who insist that their investigative reporters get more time and space than they get on tv or Twitter.

After all, we’re paying a premium for movies on demand that will soon be available on HBO, which we pay a fee for even though if we wait another three months they’ll be available free of charge on basic cable. Oh yeah, subscribers pay for that too. Newspapers should fully embrace the future and transform into news organizations and news delivery systems because, as Thomas Jefferson said in 1787, “Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.” He was really talking about the dissemination of knowledge and not the format.

We need the news. It’s the paper that’s dead.

Steve Brett
58 Advertising
Copyright 2009

Read more about Walter Isaacson’s new media model in his Time Magazine article.

Read about the New York Time’s take on its own situation in the New York Times.

Take Advantage – Market in a Recession

Aphorisms stay with us over the years because however corny they may seem, these memorable sayings have the ring of truth. When life gives you lemons, make lemonade and every cloud has a silver lining remind us that what seems to be a bad situation can often become an opportunity if we only seize the moment. Carpe Diem. Today’s recession can become tomorrow’s big break for businesses that know how to take advantage of the possibilities and the potential for growth.

Federal Express was founded in 1971, right after two years of recession, and it survived and grew through the gas and oil shock of ’73-75. Time Inc. launched People Magazine in the recession of 1974 and Microsoft was begun in 1975 because its time had come. Go all the way back to the Great Depression and you’ll find that during that era, radios and refrigerators become household staples, although we seem to remember that no one had any money.

The truth is that while consumer spending drops in tough times, it doesn’t stop altogether. Buyers make different choices; they apply new criteria to their selections; and they search for more value and less luxury. That’s why companies have to keep advertising even in a recession. You may change your medium and your message, but you can’t stop marketing and hope to succeed because the public will forget you and your competitors will steal your market share.

Remember Schlitz with its real gusto in a great light beer? No? Neither does anyone else. Andy Azula, the creative genius who does the great UPS Whiteboard commercials came to a recent Atlanta Ad Club meeting and told the story about  “the beer that made Milwaukee famous” when it was the number two brand in the country. As the recession of ‘73 took hold, Schlitz decided that its position was secure and they stopped advertising. At about the same time, the Miller Brewing Company was an also-ran that was launching a new product. Miller Lite took the world by storm with its memorable tastes great – less filling campaign that dominated the airwaves and the consumers’ consciousness. In 24 months, Miller was number two and Schlitz was on its way to being forgotten.

“Out of sight. Out of mind. Out of business,” says Azula and the ad agency that employs him, The Martin Agency, can prove it. Furthermore, Ad Age recently produced a white paper about advertising in a down economy and called it, “a great time to innovate and change…reassess.” You can either cower in the corner, cutting your budget and your sales efforts which will multiply your losses now and make it harder for you to compete in the future or you can take charge of the situation to make the most of your marketing now and position your company to really take off when the economy revives. Here’s what you need to know:

The Economy Always Expands and Contracts. It always has and it always will. But through 2008, the real GDP was still positive and inflation was very low. 2009 may be tough but the rate of decline is already slowing and the rate of personal consumption is off only slightly, not nearly as much as in ’74 or ’80. History tells us that real disposable personal income per capita has never declined by more than 2 percent. Consumer spending starts to rebound in the middle of a recession (leading us out), so now is the time to position your company for the recovery, which will most likely accelerate in 2010.

Strong Marketers Can Greatly Increase Their ROI. The paradox, according to the Martin Agency, is that companies think they can reduce their ad spending because everyone else is cutting back. But by staying in the game, you can increase your share of voice, increase your market share, and maintain your sales and revenues. When the economy recovers, the customers you kept and the new prospects you won will have a multiplier effect on your growth, which should be reflected by a handsome gain in your gross and net profits. Another fact, often overlooked, is of those companies that pull back and lose market share, most will have to spend nearly 60% more than their usual levels to regain it – if they can. Studies show that it is difficult to regain old customers who have made new relationships and the ultimate effect of pulling back ad spending may last for 2-3 years beyond the recession.

Go With Your Strengths. Take the time to evaluate your offering and identify the best performers in your portfolio of products and services. Advertise the winners and hold off on promoting any marginal performers. Stress value and stay away from discounting because that cheapens the image of your company and conditions to customers to look for those lower prices in the future. Cutting prices eats away at your bottom line and your brand. McDonalds is advertising the “value meal” over super-sizing; Hyundai is promising a “buyers assurance” plan rather than offering dealer pricing incentives; and Coca-Cola is inviting us to “Open Happiness,” just what we all need in these troubled times.

It may seem counter-intuitive, but a recession is not the time to cut back on your marketing and ad budgets. Re-think your message and re-assess your media buy. But remember that people still have to live in their homes, put food on the table and clothes on their backs. We may be staying a little closer to home, but families are still taking trips and going to the movies or a concert. Life goes on in a down economy and marketers who know how to navigate the tough times will manage better in the short term and they’ll be rewarded with substantially more growth when the economy revives.

Steve Brett

58 Advertising

Copyright 2009